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Friday, 26 April 2013

Without sufficient cause delay of 902 days in filing appeal cannot be condoned

In the instant case the assessee seems to be quite negligent by not taking the necessary steps for filing the appeal within the time prescribed by the statute .The conduct of the assessee reveals that the assessee takes the condonation of delay provision as granted. The assessee did not care to submit any request for condonation of delay , even when it was brought specifically to his notice at the time of filing of appeal itself. In granting the indulgence and condoning the delay, it must be proved beyond the shadow of doubt that the assessee was diligent and was not guilty of negligence whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. In the case of Ramlal v. Rewa Coalfields Ltd. AIR 1962 SC 361, the Hon’ble Apex Court held that the cause for the delay in filing the appeal, which by due care and attention, could have been avoided, cannot be a sufficient cause within the meaning of the limitation provision. The rule of limitation also contains a rule of justice, especially where a person chooses not to take up requisite legal remedies for an inordinate length of time and without reasonable cause, the Tribunal should apply the rule of limitation. Seekers of justice must come with clean hands. In the instant case, we do not find any reasonable cause for condoning the delay.
In the light of aforesaid decisions, the burden is on the party claiming condonation of delay to place before the court, in clear and explicit terms, all facts on which the party relies, so that the court can come to the conclusion that it is not a case of want of diligence or inaction on the part of the assessee. Inaction or want of diligence on the part of the assessee would not entitle him to the benefit of the provisions of section 253(5) of the Act. In the case under consideration, admittedly, the assessee has not shown any action or vigilance for a period of more than 902 days after the impugned order was served upon . In the facts of the present case, the assessee has not proved any inaction or negligence on the part of a third party, much less have they pleaded any action or vigilance on their own part.
 In view of the foregoing, especially when the assessee has not come with clean hands before us and has also failed to establish with cogent and proper evidence that there existed sufficient cause for not presenting the appeal within the stipulated period, delay of 902 days in filing appeal, can not be condoned.. As the appeal is barred by limitation, it deserves to be rejected on this ground alone. Therefore , we decline to admit the quantum appeal in ITA no.1238/Del./2011.
IN THE ITAT DELHI BENCH ‘G’
Shree Balaji Woollen Mills
v.
Assistant Commissioner of Income-tax
IT APPEAL NOS. 1238 & 1239 (DELHI) OF 2011
[Assessment year 2005-06]
NOVEMBER 26, 2012
ORDER
A.N. Pahuja, Accountant Member – These two appeals filed on 10.3.2011 by the assessee against two separate orders dated 4-07-2008 & 17.12.2010 of the ld. CIT(A)-Karnal, for the AY 2005-06 respectively, raise grounds relating to the disallowance of Rs. 1,40,889 on account of foreign travel expenses and levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as the 'Act'] in relation to the aforesaid disallowance of foreign travel expenses.
2. These appeals earlier disposed of vide order dated 2.6.2011, were recalled vide order dated 28.9.2012 in MA nos. 273 & 274/Del./2011. The quantum appeal filed by the assessee in ITA no.1238/Del./2011 is delayed by 902 days. Though the assessee mentioned in ground no.3 in the appeal that there was reasonable cause for delay in filing the appeal, not even a whisper has been made in the documents annexed with the appeal as to what was the reasonable cause nor any application for condonation of delay of 902 days in filing the appeal has been submitted ever since appeal was filed on 10.3.2011. None appeared before us on behalf of the assessee even when date of hearing was specifically informed to the ld. AR on behalf of the assessee when he appeared on 22.11.2012. As is evident from the aforesaid facts, quantum appeal filed by the assessee is delayed by 902 days while no request has been made by the assessee for condonation of delay in filing the appeal. In these circumstances, there being no sufficient cause for delay in filing the appeal, the appeal cannot be admitted. Regarding ‘sufficient cause’, in the case of Gopal Films v. CIT [1999] 237 ITR 655 it was held by the Hon’ble Court that
‘Whenever a party wants delay to be condoned, he should show sufficient cause. If no cause is shown at all, the only conclusion that can be reached is that the delay cannot be condoned, particularly when lack of bona fides is evident.’
2.1 It is well established that the onus is always on the assessee to prove the existence of sufficient cause and there is no presumption that the delay occasioned in the filing of the appeal is always bona fide . The law of limitation prescribed in the provisions of section 253(5) of the Act envisages that there should have been a sufficient cause for not presenting the appeal within the period as prescribed. In the instant case, the assessee has failed to show sufficient cause for condonation of delay and inaction as also negligence galore. It is the party concerned to substantiate the reasons for delay and it is not the function of the appellate authority to find the cause of the delay. The appellate authority has to examine, whether sufficient cause has been shown by the party for condoning the delay and whether such cause is acceptable or not. Inaction and want of diligence on the part of the assesse would not entitle the assessee to the benefit of the provisions of section 253(5) of the Act.
2.2 In the case of Sitaram Ramcharan v. M.N. Nagarshana AIR 1960 SC 260, the Hon’ble Supreme Court observed that the whole of the period of delay was required to be explained, which would indicate even the period prescribed by the law of limitation.
2.3 In the case of CIT v. Ram Mohan Kabra [2002] 257 ITR 773, it was observed by the Hon’ble Court as under:
“The provisions relating to prescription of limitation in every statute must not be construed so liberally that it would have the effect of taking away the benefit accruing to the other party in a mechanical manner. Where the Legislature spells out a period of limitation and provides for power to condone the delay as well, there such delay can be condoned only for sufficient and good reasons supported by cogent and proper evidence. Now it is a settled principle of law that the provisions relating to specified period of limitation must be applied with their rigour and effective consequences.”
2.3.1 In this regard, reference can be made to the decision in the case of P.K. Ramachandran v. State of Kerala AIR 1998 SC 2276. The relevant portion reads as under:
“Law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes and the courts have no power to extend the period of limitation on equitable grounds. The discretion exercised by the High Court, was, thus, neither proper nor judicious. The order condoning the delay cannot be sustained. This appeal, therefore, succeeds and the impugned order is set aside. Consequently, the application for condonation of delay filed in the High Court would stand rejected and the miscellaneous first appeal shall stand dismissed as barred by time. No costs.”
2.4 The ITAT, in the case of Sri Venkatesa Paper & Boards Ltd. v. Dy. CIT [2006] 98 ITD 200 (Chennai), held that in granting indulgence and condonation of delay, appellate authority must be satisfied that there had been diligence on the part of the appellant. In the instant case, there is no material before us, establishing diligence on the part of the assessee, even when specific opportunity was allowed to the assessee.
2.5 In the case of Vinay Extraction (P) Ltd. v. Vijay Khanna [2004] 271 ITR 450/140 Taxman 67 (Guj.) , it was held by the Hon’ble High Court that
“It is true that the apex court has held that the court should adopt a liberal approach in considering the application for condonation of delay and that substantial justice deserves to be preferred over technical considerations. However, it is equally well settled that a person invoking the discretion of the appellate or revisional authority beyond the prescribed period of limitation is required to show sufficient cause which would include showing that the petitioner/appellant was either bona fide pursuing his remedies or was prevented by sufficient cause from pursuing his remedies. Whether sufficient cause is made out or not is always a question of fact depending upon the facts and circumstances of each case and has to be established on record. An application seeking condonation of delay has also to establish that there was no negligence or inaction or want of bona fides and that the right granted under law to challenge the order was not abandoned. It cannot be overlooked that on expiry of the period of limitation prescribed for seeking legal remedy, a corresponding right accrues in favour of the other party and the same should not be lightly interfered with.”
2.6 Hon’ble Madhya Pradesh High Court in the case of Nihalkaran v. CWT [1989] 175 ITR 14/[1988] 40 Taxman 421 has held as under:
“The burden is on the party claiming condonation of delay to place before the Court, in clear and explicit terms, all facts on which the party relies, so that the Court can come to the conclusion that it is not a case of want of diligence or inaction on the part of the applicant. In the instant case, the applicant has failed to place on record all these facts. Inaction or want of diligence on the part of the applicant would not entitle the applicant to the benefit of the provisions of section 5 of the Limitation Act. In our opinion, therefore, the applicant has failed to make out a case that there was sufficient cause for delay in filing the application under section 27(3) of the Act. The application for condonation of delay is, accordingly, rejected. As the application under section 27(3) of the Act is barred by limitation, it deserves to be rejected on this ground alone.”
2.7 In Madhu Dadha v. Asstt. CIT [2010] 186 Taxman 8, Hon’ble Madras High Court in their decision dated 23.6.2009 while referring to the aforesaid decision of the Hon’ble Apex Court in P.K. Ramachandran (supra) observed that
“14. At this juncture, we have to be guided by the judgment reported in [1990] 1 LLN 457 in the case of T.N.M. Bank Ltd. v. App. Auty., Shops Act. In that particular case, the Division Bench of this court has held that,
“… We are of the view that the question of limitation is not merely a technical consideration. Rules of limitation are based on principles of sound policy and principles of equity. Is a litigant liable to have a Damocles’ sword hanging over his head indefinitely for a period to be determined at the whims and fancies of the opponent?”
In that decision, this Court has held that the delay of 285 days in preferring the appeal could not be condoned. It was held that the condonation of delay was not justified on facts and evidence of the case. As rightly pointed out that the Rules of limitation are based on principles of sound public policy and principles of equity. Though there is no presumption that the delay is occasioned deliberately or on account of culpable negligence, if the admitted facts in that case are taken note of, there is no doubt that the delay on the part of the appellant is deliberate and the appellant is clearly guilty of culpable negligence. Such negligent attitude of the appellant was not taken care to preserve the right of appeal and having been slept over for more than 558 days and not explained the delay without any reasonable doubt, the appellant cannot avail sympathy or discretion of this Court.”
2.8 In view of the aforesaid observations, Hon’ble High Court concluded that the discretion having been rightly refused by the Tribunal, there was no sufficient reason or cause to interfere with the order passed by the Tribunal. In this case, the assessee failed to explain the sufficient cause or reason by giving necessary details as to how the delay of 558 days from January 2007 to the date of filing the appeal had occurred. Hon’ble High Court in this case quoted the following findings of the ITAT
“… From the facts it seems that the assessee was negligent by not taking the necessary step for filing the appeal within the time prescribed by the statute and thereby from the conduct of the assessee, it seems that the assessee takes the condonation of delay provision as granted. It is well settled law that the court helps the vigilant and not indolent. We are therefore of the view that the assessee has not made out sufficient cause for condoning the delay in the present appeal. The cause shown by the assessee is much less than the sufficient cause as to why the appeal was not filed within the limitation period and even after the expiry of limitation period. Since the assessee has not given any details as to what step she took for filing the appeal within the limitation period or as early as possible therefore, the explanation for delay of 558 days appears to be too insufficient, unsatisfactory and unreasonable for condoning the inordinate delay. From the affidavit it reflects that averments are quite vague as no dates have been specified as to when the papers were handed for drafting an appeal and on what occasion the enquiries were made for preparation and filing of appeal. Moreover, when the assessee never went for signing the appeal, how it could have been filed as presumed by the assessee. Even the conduct of the assessee before this Tribunal is also not appreciable as various notice were sent to the assessee and first time the assessee appeared on 3.3.2008 when the appeal was heard. We therefore decline to condone the delay of 558 days in filing the present appeal. Accordingly, the prayer for condonation of delay is rejected.”
3. In the instant case also the assessee seems to be quite negligent by not taking the necessary steps for filing the appeal within the time prescribed by the statute .The conduct of the assessee reveals that the assessee takes the condonation of delay provision as granted. The assessee did not care to submit any request for condonation of delay , even when it was brought specifically to his notice at the time of filing of appeal itself. In granting the indulgence and condoning the delay, it must be proved beyond the shadow of doubt that the assessee was diligent and was not guilty of negligence whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. In the case of Ramlal v. Rewa Coalfields Ltd. AIR 1962 SC 361, the Hon’ble Apex Court held that the cause for the delay in filing the appeal, which by due care and attention, could have been avoided, cannot be a sufficient cause within the meaning of the limitation provision. The rule of limitation also contains a rule of justice, especially where a person chooses not to take up requisite legal remedies for an inordinate length of time and without reasonable cause, the Tribunal should apply the rule of limitation. Seekers of justice must come with clean hands. In the instant case, we do not find any reasonable cause for condoning the delay.
4. In the light of aforesaid decisions, the burden is on the party claiming condonation of delay to place before the court, in clear and explicit terms, all facts on which the party relies, so that the court can come to the conclusion that it is not a case of want of diligence or inaction on the part of the assessee. Inaction or want of diligence on the part of the assessee would not entitle him to the benefit of the provisions of section 253(5) of the Act. In the case under consideration, admittedly, the assessee has not shown any action or vigilance for a period of more than 902 days after the impugned order was served upon . In the facts of the present case, the assessee has not proved any inaction or negligence on the part of a third party, much less have they pleaded any action or vigilance on their own part.
5. In view of the foregoing, especially when the assessee has not come with clean hands before us and has also failed to establish with cogent and proper evidence that there existed sufficient cause for not presenting the appeal within the stipulated period, delay of 902 days in filing appeal, can not be condoned.. As the appeal is barred by limitation, it deserves to be rejected on this ground alone. Therefore , we decline to admit the quantum appeal in ITA no.1238/Del./2011.
6. As already stated, none appeared on behalf of the assessee when these appeals were called for hearing nor any request for adjournment was filed . Earlier also these appeals were dismissed for non-prosecution. The ld. AR on behalf of the assessee was specifically informed on 22.11.2012 itself that the hearing of the appeals is fixed for today. It, therefore, appears that the assessee is not interested in pursuing these appeals. In these circumstances, following the decision of the Delhi Bench of the Tribunal in the case of CIT v. Multiplan (India) (P.) Ltd. [1991] 38 ITD 320 and the decision of the Hon’ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar v. CWT [1997] 223 ITR 480, the penalty appeal filed by the assessee is also dismissed in limine
7. In the result, both these appeals are dismissed in limine.

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